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For Immediate Release: Apr 04, 2013
Contact: Kirsten Stade (202) 265-7337

CADILLAC CONTRACTS CANNIBALIZE AGENCY SCIENCE BUDGET

Review Asked for Overhead of Up to 50% in Open-Ended Reclamation Contracts


Washington, DC — Hefty research contracts executed by the U.S. Bureau of Reclamation should be reined in, according to an audit request filed today by Public Employees for Environmental Responsibility (PEER). The agency has been increasingly transferring work previously performed by staff scientists out to contractors at much higher costs than doing the work in-house.

PEER is asking the Department of Interior’s Office of Inspector General (IG) to conduct both an audit and performance review of Reclamation’s aggressive contracting, with a focus on such features as –

  • “Cost comparisons were not conducted or considered” in framing a master agreement for a series of contracts, according to an agency memo;
  • Contracts divert between 30 and 50% of funds to overhead (“indirect costs”). The replacement of Reclamation staff with contractors in just one phase of work means that “the total cost of the proposal approximately doubled,” per an internal email; and
  • Contracts are drafted in such an open-ended fashion that “we can throw in the kitchen sink,” in the words of one researcher.

“Reclamation needs some adult supervision over its contracting decisions,” stated PEER Executive Director Jeff Ruch, who filed the IG request. “Regardless of whether the contract is with another agency or a private firm, competent federal managers should be looking very closely at relative costs.”

The PEER request details how Reclamation’s Klamath Basin Area Office has increasingly contracted out work previously performed by in-house scientists within its Water Quality unit, principally to the U.S. Geologic Survey (USGS). This expansion of contracted work has come at the expense of filling vacancies, and in some cases eliminating positions altogether. During the past eight months, Klamath management deliberately created personnel gaps to justify shifting more work to USGS.

In order to facilitate this expansion of contract work, USGS has extended itself beyond its capabilities. For example, Reclamation staff had to train USGS staff and, in several instances, USGS lacked the equipment to perform contracted tasks. This resulted in using Reclamation resources without a rebate or reduction of contract payments. In addition, USGS has had to hire additional staff to handle the increased workload at costs substantially higher than if Reclamation performed the work in-house. Nonetheless, Klamath management has indicated it seeks to even further expand contract reliance by dismantling its Fisheries Resource Branch and reassigning all staff scientists. Internal memos suggest that the move to contract-science flows from management’s desire to prevent researchers from raising troublesome issues.

“The documents surrounding these carte blanche contracts reveal not an ounce of hard bargaining,” Ruch added. “The notion that these padded contracts are cost-saving measures, as Reclamation managers allege, is utterly without foundation.”

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Read the PEER complaint

View “throw in the kitchen sink” email

Examine admission of no cost comparison

Look at doubling of cost message

See drive by Reclamation to contract out its science